The Paper Federation has reacted cautiously to reports of agreements emerging from the Bonn talks to rescue the Kyoto Protocol.


Agreements were reported to have been reached on two main issues: carbon sinks, and financial penalties for countries that fail to meet targets for reducing gases.


David Gillett, the Paper Federations head of environment, said carbon sinks had "always been a contentious issue".


A stock that takes up carbon is called a sink. Forests offer the potential to be managed as sinks to promote the sequestration of carbon by being allowed to mature and remain unharvested.


"Paper products should be part of the whole system in issues relating to carbon sinks, and the industry needs to take a closer look at these," said Gillett.


He said the creation of a carbon sink trading market, another outcome of the talks, would not greatly benefit continuous process industries such as paper, as they are linked to climate change agreements.


Combined heat and power (CHP) projects are also coming under threat.


A number of them have been cancelled, threatening government climate change targets.


The DEFRA has not provided details of the projects concerned.